Fiscal Cliff deal could support smart grid innovation

The fiscal cliff deal could enable investments by utility companies.

By Donna Donnawitz
January 10, 2013
The deal made to prevent the United States from going over the Fiscal Cliff could contribute to opportunities in the smart grid. Analyzing conclusions made by the Associated Press and National Public Radio, a recent Smart Grid News report explained that the tax dividends included in the Fiscal Cliff deal could provide a catalyst for utility providers.

Evaluating how the Fiscal Cliff deal impacts utilities
Citing NPR, the news source explained that the tax dividends involved in the Fiscal Cliff deal should position utility providers to make significant investments moving forward. Because the legislation does not increase the tax on dividends, utility companies should be able to invest more heavily in new projects. This is a part of the deal that many utility providers lobbied for during its creation, and they are now well placed to take advantage of the solid tax foundation.

Looking at smart grid costs
Having a good tax situation is key for utility providers making smart grid investments because the costs of such projects can be substantial.

To understand the full scope of smart grid costs, all you have to do is consider the current state of the electrical grid and what it would look like if smart grid were used. At this point, many utility providers have miles and miles of power lines covering a region serviced by a few power generation sites. The cost of power from these sites varies depending on demand and utility companies have to balance power delivery demands with energy availability and cost, measuring energy use at different times and, in some cases, based on estimates.

The problem is that there isn't any sort of communications network connecting all the assets in the power grid. As a result, utility providers can only measure how much power people use by looking at their meters. In many cases, outages are discovered when customers without power call the provider and the company sends technicians to drive through towns and find down lines.

A utility network with smart grid can communicate power use and grid condition details in real time, enabling much more effective purchasing from generation sites. It also means that utility providers have to invest in everything from new power measurement tools to serial to Ethernet media converters to get serial-specific solutions to work well in conjunction with the Ethernet systems needed to enable real-time communication. The costs of such large-scale utility investments are so substantial that a solid tax dividend foundation is necessary to support investments.

Perle offers a range of cost effective serial-to-Ethernet converters to help meet NERC-CIP compliance for the protection of critical cyberassets in substations. The IOLAN SDS HV/LDC Terminal Server is designed to meet harsh environments associated with Power Substations with attributes such as support for substation AC and DC voltage ranges, extended operating temperatures and meeting emission, immunity and safety approvals associated with substation IT equipment.


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